Austria-based Hon Hai affiliate buys Slovenian ICT company Iskratel for $42 mil.
TAIPEI, NNA – Austrian high-tech firm S&T AG (S&T), an affiliate of Apple products assembler Hon Hai Precision Industry Co.’s subsidiary Ennoconn Corp., has gone on an acquisition drive this week despite global market woes brought about by the COVID-19 pandemic.
The company, in which Ennoconn owns a 27.6 percent stake, has signed a deal to acquire Slovenian information and communications technology (ICT) provider Iskratel Group at 37.5 million euro (about $42 million) to expand its global business including eastern Europe and Russia.
It is also buying more than half of German IT provider CITYCOMP Service GmbH.
In a statement on the full acquisition of Iskratel, S&T CEO Hannes Niederhauser said, "With this acquisition, we are positioning ourselves even more strongly for the future in our focus areas of smart factories and train radio for high-speed trains."
"We have been following 5G developments for a long time, have identified applications ready for this technology, and expect to gain an advantage by strengthening our 5G product portfolio. Due to the synergies, we will be able to increase the Iskratel result to over 10 percent EBITDA within the next two years," he said.
The Austrian company said Iskratel's developments in Industrial Internet of Things (IIOT) software and 5G applications, in particular, will further enhance S&T product range.
The company has already partnered Iskratel in projects such as implementing 5G equipment on high-speed trains in Slovenia, where there are opportunities in the transport business, it said.
S&T said in its statement, "Further synergies will open up in areas such as sourcing, manufacturing and sales, with S&T providing Iskratel access to the Western European market. In return, S&T can draw on approximately 500 cost-efficient software engineers and excellent long lasting Iskratel’s reputation in Adriatic and Eastern Europe."
Kranj-based Iskratel Group provides ICT to operators of telecommunications, railway and energy networks, and also to the industrial automation sector.
It has a global footprint in over 50 countries and is especially active in Adriatic and Eastern Europe.
Meanwhile, the board of S&T also approved to buy a 55.5 percent stake in German CITYCOMP Service GmbH for $6 million euros to develop its IT business, according to an Ennoconn filing to the Taiwan Stock Exchanges on Wednesday.
“Through this acquisition, we will become an IT service provider with a nationwide presence in Germany and will be able to broaden our customer base and thus better serve our existing customers,”said Niederhauser in a statement.
S&T plans to develop a nationwide service network in Germany following the acquisition. It also wants to promote the use of cost-effective IT capabilities from eastern Europe to support the IT services in Germany, according to the statement.
Established in 1988, Citycomp has developed into a comprehensive IT service provider in areas of network infrastructures, client systems and all kinds of devices in the retail environment.